would also suggest another key alternative to divestment: engaging with fossil fuel companies to press for (1) reduced capital expenditure on fossil fuel production (particularly from higher-cost projects); and (2) more investment in low-carbon energy sources. Indications that shareholders are finally beginning to get traction with fossil fuel companies on these topics. Witness Shell and BP support for shareholder resolutions on climate: http://www.theguardian.com/environment/2015/jan/29/shell-urges-shareholders-to-accept-climate-change-resolution

Since universities are shareholders in all of these companies, students can push for them to engage more with companies in their portfolios.

kudos on an excellent post Much to agree with. I offer several brief observations:

Still a need for policy: without a carbon tax or similar carbon price, not sure innovation will ever occur quickly enough to solve the climate problem. Challenge is that clean energy innovators must compete with the incredible innovation that is occurring in the fossil fuel world (witness seismic imaging, ultra-deepwater, horizontal drilling, etc.). We need to change the incentives for innovation (i.e. where bright young college grads go to work), and that relates to the business landscape for clean energy vs. fossil fuels - which policy can affect.

need to ensure innovation is focused on the right goal: for all the focus on making renewables cheaper (i.e. reducing their LCOE), the real issue is always cost vs. price. If you can get the cost below the relevant price, then you are in business. Higher prices at the distribution level are why distributed energy is such a promising opportunity. See commentary from google's engineers on their RE < C effort: http://spectrum.ieee.org/energy/renewables/what-it-would-really-take-to-reverse-climate-change

need for innovation in efficiency: though you are correc that efficiency alone cannot solve the problem, demand-side is probably more in need of innovation that the supply side. findings that, at least in US govt-sponsored research, demand gets short-shrifted: http://www.tandfonline.com/doi/abs/10.4155/cmt.10.16#.VOO4GS7Skok

clean energy is different from putting a man on the moon: though you do not make this analogy directly, many tend to argue that we need an Apollo program for clean energy. as has been observed, however, needs of clean energy innovation very different from putting a man on the moon. see discussion here: https://www.fas.org/sgp/crs/misc/RL34645.pdf